Iran's Hardliners Dig In as the World Routes Around Them

They Tighten Their Grip on the State. They Lose the Economy that Feeds It 

Vaughn Cordle CFA 

 

 

The sons of a bitch hardliners are dug in like Alabama ticks. The war that was supposed to open Iran has closed the fist instead — the Revolutionary Guard runs the state through a phantom Supreme Leader no one has seen in five months. But the same intransigence that holds the regime together is bleeding it dry. The world is building around Hormuz, and Iran’s oil revenue is collapsing with it. Iran keeps its grip and loses its economy.

The IRGC Is in Control

Iran’s Supreme Leader has not been seen alive in more than five months. Mojtaba Khamenei was named to the post on March 8, days after his father was killed in the opening strikes of the war. Since then: no appearance, no broadcast, no verified footage. Decrees issue in his name. Whether he commands them, whether he is incapacitated, whether he is a name the security core rules behind — no citable source can say. Iran’s Supreme Leader is a signature and a silence.

The world expected the war to crack Iran open. It has done the opposite. In the whole history of the Islamic Republic, every scenario for succession pointed the same way — toward an opening, a loosening, a step, however small, toward the world. That is not what happened. Power did not diffuse. It narrowed. The men left standing are the hardest men in the system.

A collective security council centered on the Revolutionary Guard governs the state. Pezeshkian chairs the meetings. The Guard sets the line. The man who sets it is Ahmad Vahidi, the Guard’s commander-in-chief, installed in March, the central figure on military response, negotiating posture, and security policy. On August 9, Mohsen Rezaei, the Guard’s commander through the Iran-Iraq War, became Mojtaba’s representative to the council and its secretary. The man he replaced, Mohammad Bagher Zolghadr, did not fall. Mojtaba named him political advisor the same day. The chairs change. The men do not. Vahidi, Rezaei, Zolghadr — former Guard commanders rotating through the controls. The diplomats, Araghchi and Pezeshkian, negotiate. The security core draws the boundaries behind them.

There is no opening in any of this. No liberalization program, no reform, no thaw.

And there is a current inside the system harder still than the men running it. A cleric, Mohammad-Bagher Kharazi, is calling openly to replace the Islamic Republic with something more absolute — an “Islamic government,” stripped of even the republic’s forms. He claims a shadow network of 250,000, a figure no source can verify. But he is not easily dismissed. On August 6, he predicted that Rezaei would take over the security council. Three days later, Rezaei did. Whatever Kharazi knows, he knew that.

The regime’s answer tells the story. The Supreme Leader’s office and the president’s office called his claims fundamentally false. The Special Clerical Court summoned him and opened a prosecution. The hardliners in power are moving against a man who wants to go harder. That is the direction of Iran. So far toward the extreme that the extremists in charge are prosecuting the one who would out-flank them.

Underneath is force. Human rights monitors and UN experts have counted the toll. More than six thousand arrested since February. Four hundred and forty-four verified executions in the first seven months of the year, seventy-one in July alone. Fifty-six killed on security charges since March, twenty-seven tied to the January uprising. When the strikes came, the regime blacked out the internet — cutting up to 97 percent of the country’s network traffic at will. A state that must execute at this rate and blind its own people to survive is not confident. But it is not a collapsing one either. It is digging in.

This is what the war produced. Not regime change. Regime hardening. The reformers are gone, the diplomats are figureheads, the Supreme Leader is unseen, and the Guard runs the state through a security council it controls. The world hoped the pressure would open Iran. Instead it closed the fist.

The World Is Building Around Hormuz

Iran can disrupt the Strait of Hormuz. It cannot close it, and it cannot stop the world from routing around it.

For five months, Iran has kept the strait contested — attempting to levy transit tolls of 5 to 7 percent of cargo value, harassing tankers, firing on ships that cross without permission. The tolls are contested and, most legal analysts hold, unlawful: under the Law of the Sea, passage through an international strait cannot be impeded, and fees are permitted only for services actually rendered. Maritime traffic has fallen 80 to 90 percent below pre-war levels. But the strait is not sealed. Iran needs it open for its own oil, and the barrels still move, escorted and rerouted, through the same water Iran threatens to close.

The threat still has teeth. The world cannot yet bypass Hormuz. Twenty million barrels a day normally transit the strait, and the pipelines built to route around it — Saudi Arabia’s East-West line to the Red Sea, the UAE’s Habshan-Fujairah line to the Gulf of Oman — carry a fraction of the load. After committed flows, berth limits, and domestic refining, the world can currently reroute between 13 and 28 percent of what Hormuz carries. The rest has no other way out. Kuwait, Qatar, and Bahrain have zero domestic bypass capacity. Japan brings 70 percent of its crude through the strait. For now, Iran’s hand on the valve is real.

But the valve is worth less every month Iran squeezes it.

The squeeze is triggering what ends Iran’s leverage for good: construction. The UAE is building a second Fujairah pipeline, targeted for 2027, to double its bypass capacity. Iraq has approved feasibility studies for lines that would route its crude around the strait. Kuwait is negotiating pipeline tie-ups with Saudi Arabia and the UAE. The buyers are moving too. China, which took 80 percent of Iran’s exported crude, has cut its purchases and is replacing the lost barrels with Russian crude. India has pushed Russian oil from a quarter of its imports to half.

The signal reached Moscow this week. Russia’s deputy prime minister, Marat Khusnullin, told the state news agency that a rail link to the Indian Ocean “should be explored,” routing through Turkmenistan, Iran, Afghanistan, and Pakistan to hedge against the risks at Hormuz and the Bosphorus. No such link exists yet — it is a proposal, not a route, and it would move freight, not crude at scale. But it reveals something: even Russia, Iran’s partner, is now talking publicly about building around the chokepoint rather than counting on it.

IEA Executive Director Fatih Birol put it plainly: the crisis is redrawing the global energy map.

None of this restores Iran’s position. It erodes it. Every pipeline poured, every buyer that finds another supplier, every tanker rerouted is a permanent subtraction from the value of the chokepoint Iran holds. Iran is spending its leverage to build the infrastructure that will replace it.

And Iran cannot even route its own oil around the strait. Its Goreh-Jask pipeline, built to bypass Hormuz, has sat idle since September 2024 — zero barrels a day. The country threatening to close the world’s most important oil passage has no way around it itself.

Iran’s crude exports collapsed from 1.85 million barrels a day before the war to between 209,000 and 260,000 in May, a drop of 84 to 89 percent. Iran is losing an estimated $200 to $250 million a day in oil export revenue as payment-lag disruptions hit, by Kpler’s tracking, close to the $170 million the Treasury cites. Trump put the number at $500 million. Trump exaggerates to make a point. The war doesn’t need exaggeration. The facts are punishing enough.

Verdict

The sons of a bitch hardliners are dug in like Alabama ticks. The Revolutionary Guard runs the state, the Supreme Leader is unseen, and the regime executes and blacks out the internet to hold on. It is not collapsing. It is digging in.

But holding on has a price. Holding Hormuz gives Iran leverage today and costs it leverage tomorrow. The strait it controls is the strait the world is learning to live without. Iran may outlast the blockade. It may outlast the war. But it will not outlast the pipelines, the reroutes, and the buyers who have decided never to depend on that water again.

Iran tightens its grip and loses its host — the economy. The chokepoint is becoming a bypass.